Question

Can Costing Accounting works be taken over by the book keeper in the accounting record process? is Cost Accounting works indispensable in a manufacturing concern. Debate the above statement

Answer 1

Can Costing Accounting works be taken over by the book keeper in the accounting record process?

Cost accounting is a specialized accounting system. The book keeper can take over the costing accounting works if the two systems, namely financcial accounting system and the costing accounting system are integrated. However, the book-keeper needs to have understanding of the integrated system and how it aids the maintenance of cost accounting records. If need be, he should be given special training to handle the integrated system.

Is Cost Accounting works indispensable in a manufacturing concern ?

Yes, Cost accounting records are necessary, as they give information on the costs of products or services. The information given would include the break up of costs such as, direct material cost, direct labor cost and overhead cost, which information is required to take decisions about pricing, product mix etc.

Further, if there is standard costing inbuilt, the costing system aids in controlling of costs through the ascertainment of cost variances.

In the absence of costing system, there would be no information on costs or deviations of costs from standards. Adhoc information would be taken from the financial accounting system, when decisions are taken. This can result in wrong decisions being taken. Besides, there would be no control of costs, by comparing them with estimates or standards on a periodic basis.

For the above reasons, cost accounting works is indispensable in a manufacturing concern.